Energy efficiency creates new business opportunities.

With the Kyoto Protocol on global warming likely to come into force soon, discussion on implementing an environment tax has gone into high gear. European nations already have such a tax, but Japan postponed adopting one even though the issue was the subject of considerable debate over the past few years. We earnestly hope serious consideration will be given to it this time around.

The environment tax, also known as carbon tax, is a levy to be imposed on the consumption of electricity and gas as well as fossil fuels such as oil and coal in proportion to the quantity of the carbon dioxide they emit.

The Environment Ministry aims to implement the tax next fiscal year. It has already made draft plans to impose it at a relatively low rate of 2 yen per 1 liter of gasoline and kerosene consumed. The ministry plans to use the tax revenue, estimated at about 1 trillion yen a year, to facilitate wider use of natural energy like wind power and solar energy. In doing so, it aims to promote energy-saving equipment among the public.

The ministry estimates carbon dioxide emissions can be reduced by 10 percent by cutting down on the consumption of gasoline and other oil products through higher prices and other measures to prevent global warming. The agriculture ministry supports adoption of the environment tax in fiscal 2005 because it wants to use part of the tax revenue for forest management.

However, the Japan Business Federation (Nippon Keidanren) has hardened its opposition to the tax in recent days. It says businesses will have to shoulder a greater financial burden. It says manufacturers of iron and steel that use large quantities of coal and coke will have to pay an additional 160 billion yen in tax. It contends that a greater tax burden will make Japanese firms less competitive and be a drag on investment in development of new technology. It also argues that the tax of 2 yen per 1 liter of oil consumption is too small to serve as an incentive to use less gasoline and electricity.

As regulations of exhaust emissions from automobiles have shown, however, there have been many instances where targets and limitations put into force by the government actually enhanced technological levels and promoted economic development.

Furthermore, countries around the world are taking steps to prevent global warming by pushing ahead with energy-saving technology. Energy-efficient hybrid (gas- and electric-powered) cars, such as Prius manufactured by Toyota Motor Corp., sell well. And much headway is being made in the development of fuel cells for home consumption. These changes occurred because of the public's keener interest in global warming.

Adopting an environment tax will show that the government is resolved to create an energy-efficient society. It will gradually change the structure of industries in this country and the perception of consumers.

We know Nippon Keidanren is opposed to the environment tax. But what do individual industries and firms think about it? A questionnaire survey of 2,800 large businesses conducted last fiscal year by the Environment Ministry showed that 30 percent of respondents said they were ``in favor'' of or ``rather in favor'' of the tax. This clearly shows that a considerable number of companies are interested in finding new business opportunities in an energy-efficient society.

The government's Tax Commission will discuss the Environment Ministry's plan as part of overall tax reform due next fiscal year.

Within the government, however, there is little likelihood that the ministries will offer up any meaningful ideas. That's because the Ministry of Economy, Trade and Industry opposes the tax, just like Nippon Keidanren.

The Kyoto Protocol obliges Japan to reduce carbon dioxide emissions and other greenhouse gases by 6 percent from the 1990 level. If government ministries and business leaders sit down for serious discussions on how Japan can fulfill this goal, they should be able to reach a compromise. This is not the time for them to refuse even to consider the issue.

--The Asahi Shimbun, Nov. 2(IHT/Asahi: November 3,2004)